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Northeast, the rise of the Nationalist movement changed the relationship between Japan and its local collaborators. The increasingly forceful demands for the recovery of economic and political concessions from Japan—expressed in newspapers and through boycotts, strikes, and demonstrations—put pressure on the local warlord Zhang Zuolin to appease some of these demands lest he, like his rivals to the south, find himself the target of nationalist anger. The pressures he was under from nationalist protesters strengthened Zhang's hand in bargaining with the Japanese, who kept up their own demands throughout the 1920s. Zhang maneuvered shrewdly between these two opposing forces, using each as a shield to stave off the other. Although Zhang's repression never permitted boycott and strike activity to reach the intensity it did in the south, whether by accident or design protesters sometimes slipped through his control, as happened in the 1923 Jilin and Qiqihar demonstrations demanding the return of the Kwantung leasehold and railway rights. Japanese officials never entirely believed his protestations of helplessness; they grew increasingly irritated with both Zhang's pleas for patience and his promises to respond to demands later, when nationalist tempers had cooled.²⁷

      Even worse, Zhang and his allies were beginning to make investments that would compete with Japanese enterprises and threaten its economic dominance. These included railways and a port facility aimed at creating a parallel Chinese transportation and marketing network in order to break Mantetsu's monopoly. Zhang also established a cotton mill in Fengtian, and his associates created companies for sugar, timber, and coal production. With Zhang's encouragement, Chinese-owned public utilities sprang up, and Chinese merchants opened new businesses throughout the growing cities of the Northeast. While Japanese colonial officials looked on in outrage, the man whose wars they had bankrolled and whose armies they had protected seemed to betray their trust.

      Complaints about Zhang's insincerity mounted; but when Kwantung Army officers conspired to resolve the situation by assassinating Zhang, they gravely miscalculated. Zhang Zuolin was succeeded by his son, Zhang Xueliang, who proved to be even less tractable than Zuolin. Well aware of Japan's role in his father's death, Xueliang took his revenge by pushing harder than ever for rights recovery, stepping up investments, and—the crowning blow—signing an agreement with Jiang Jieshi that brought Manchuria under the control of the Guomindang. While this did not mean full political and military integration, Zhang Xueliang now referred all diplomatic matters to the Guomindang, greatly complicating Japanese negotiations concerning Manchuria. Their worst fears appeared to have been realized when Jiang Jieshi announced in the spring of 1931 that the new principles of Guomindang foreign policy included the return of the Kwantung Leased Territory and the recovery of rights to operate Mantetsu.

      The sense of crisis among the Japanese in the Northeast intensified, as a fall in profits in the late 1920s seemed to confirm that the nationalist strategy of economic encirclement was working. Though the contraction in colonial revenues was in fact caused by other factors—Mantetsu profits fell due to a drop in world demand for soybeans rather than the Chinese railroad network, and Japanese shopkeepers were imperiled by competition from a Mantetsu consumer co-op and not Chinese merchants—the Japanese blamed it squarely on what they called the “anti-Japanese movement.” Within the various sectors of the colonial state and at every level of colonial society, people compiled catalogs of grievances: obstructions to land purchases, illegal seizures of goods, triple taxing, refusal to permit construction of previously agreed upon railways, unpaid debts, scurrilous newspaper reports, hostility in textbooks, assaults, vandalism, and murder. Settler society organized itself and began to lobby the metropolitan government. Through petitions and speeches they insisted on firm measures to settle the “over 500 pending cases” in what became the catchphrase of an appeal for military intervention.²⁸

      Responding in part to these lobbying activities, in part out of their own perception of the gathering crisis, government officials began to discuss options for an independent Manchuria. This was not entirely a new idea, for since the 1911 Revolution Japanese policy makers had flirted with the possibility of severing Manchuria from China. The issue was seriously taken up at the Eastern Conference of 1927, and in 1929 the Kwantung Army began developing operational plans for occupation. Matters came to a head in the summer of 1931, when the Wanbaoshan and Nakamura Incidents became the focal point of agitation for military intervention.

      The Wanbaoshan Incident involved a dispute over irrigation rights between 200 immigrant Koreans, whose settlement in eastern Manchuria had been facilitated by the Japanese authorities, and a handful of Chinese landowners. In a climate of hostility where the Chinese regarded the Koreans as tools of Japanese aggression in Manchuria and the Japanese responded angrily to harassment of Japanese nationals (as the Koreans in Manchuria were considered), the dispute quickly escalated. Chinese police told the Koreans to leave, but Japanese consular police insisted they could stay. A group of 400 Chinese farmers then attacked the Koreans and were in turn fired at and driven off by the Japanese police.²⁹

      In the meantime, the arrest and execution of a Japanese intelligence officer by Chinese soldiers created a second cause célèbre. When discovered near the border of Inner Mongolia, far into the Russian sphere of interest in north Manchuria, army captain Nakamura Shintar

claimed he was an agricultural expert. However, because his belongings included a military map, narcotic drugs, weapons, and surveying instruments, the Chinese soldiers assumed he was a military spy and shot him.³⁰

      In and of themselves, there was nothing extraordinary about these two incidents; similar things had occurred numerous times in the past. But in the contentious atmosphere of 1931 they became lightning rods for resentments on both sides. While Chinese nationalists rioted against the Japanese, the Japanese settler organizations Yuhokai and the Manchurian Youth League dispatched representatives to Japan to make speeches and lobby government officials. They were joined by right-wing organizations, political party hawks, and army spokesmen who supported their demands for government action to end the “outrages.”³¹

      By 1931 there was widespread consensus among the Japanese in Northeast China about the need for a new approach. Although this imperial establishment was a big fish in its own pond, it figured very little in the sea of international and domestic concerns which beset Japan at that time. This would change, however, as a series of increasingly ambitious imperial projects carried out over the 1930s made Manchuria the centerpiece of the empire and led to the birth of Manchukuo.

      THE PUPPET STATE OF MANCHUKUO

      The Kwantung Army set the construction of Manchukuo in motion with the military conquest of the Northeast known as the Manchurian Incident. Between September 18, 1931, and the Tanggu Truce of May 31, 1933, a series of campaigns brought the four provinces of Jilin, Liaoning, Heilong-jiang, and Rehe under Japanese military control. The occupation began with a conspiracy engineered by Kwantung Army officers. What had failed in 1928 worked to spectacular effect in 1931. Staging an explosion of Mantetsu track near the Chinese military base in the city of Fengtian (now known as Shenyang), the conspirators used the alleged attack as a pretext to open fire on the Chinese garrison. Over the ensuing days and months the army quickly escalated the situation, first moving to occupy the railway zone and then embarking on the operations to expel from Manchuria the estimated 330,000 troops in Zhang Xueliang's army. Unlike in 1928, the metropolitan government ultimately sanctioned army action; the army high command in Tokyo refused to rein in their forces in Manchuria, and the cabinet was unwilling to relinquish territory gained in a fait accompli. Thus the Kwantung Army was permitted to overrun the Northeast, and Japan found itself in full possession of Manchuria.³²

      Early in the campaign, it became clear to the plotters that their home government would not approve the formal annexation of the Northeast and the creation of a Japanese colony in Manchuria. Instead, they enlisted the collaboration of powerful Chinese, organized a “Manchuria for the Manchurians” movement, and declared Manchukuo an independent state. Manchukuo was created in March 1932 with Chinese serving as the titular ministry and department heads; actual power, however, resided with the Japanese vice-ministers and the Japanese-dominated General Affairs Board. Japan quickly recognized Manchukuo and signed a mutual defense treaty making the Kwantung Army responsible for its national security. Behind the fiction of the puppet state, Japan had effectively turned Manchuria into

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